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How Amazon Sellers Can Prepare for the 2018 Shipping Rate Changes

Amazon is a highly competitive marketplace, and it is important to stay up-to-date with any changes that may affect your business. With customer expectations nowadays, shipping costs can potentially lose you a customer, so making sure you understand the upcoming 2018 rate changes is imperative.

Are you getting the best rates?

If you haven’t evaluated your shipping costs in a while, now is the perfect time. You should compare USPS Priority Mail and First Class rates with UPS and FedEx, especially if you have pre-negotiated rates through UPS and FedEx. Take the time to compare the costs of custom packaging versus carrier packaging to see if there’s any additional savings that you may have been missing out on. If you’re using a shipping solution like ShippingEasy, streamline your selection processes using shipping rules (automated shortcuts) to make sure you never forget the most optimized way to ship while fulfilling your orders.

Comparing carriers and services

Shippers often forget that with the 2017 rate changes, USPS first class shipments were extended to anything weighing up to 15.99 oz. In 2018, First Class shipments will see an increase across all weights averaging at 19 cents. Packages weighing between 1-4 ounces will only see a 5-cent increase. Priority Mail rates will increase for most packages, but some weight/zone combinations will actually see a decrease. For lighter packages, USPS typically is cheaper than UPS and FedEx, unless you have competitive pre-negotiated rates through UPS and FedEx. If you are comparing UPS and FedEx for any packages, be sure to keep in mind that there are surcharges tacked on to your shipment that you may vary from what you see when purchasing the label. Keep tabs on these surcharges, as they can add up and become costly over time.

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Custom packaging vs carrier packaging

If you’re using custom packaging, you may be paying more for your shipping than you realize. For example, if you’re shipping a 9 pound package to zone 8, with custom packaging, you would pay $32.74 in 2018. If the contents could fit in a large flat rate Priority Mail package, you would only have to pay $17.10. That’s a $15.64 savings! If you are concerned about branding, your shipping solution should allow you to add a logo to your label or create a branded, customized packing slip.

It can be difficult to compare differences in delivery times between carriers. They are generally similar, depending on the methods, and it really boils down to the weight of the package, the cost, and if you have guaranteed delivery. Once you assess these differences, you can set up rules and saved selections to remove the manual process used to select these shipping selections.

Setting up optimizations to streamline the selection process

 Your shipping solution should allow you to set up optimizations to streamline the shipping selection process. Rules and saved selections remove any human error in selecting a more costly selection for shipping method. These optimizations also eliminate wasted time when shipping, saving you additional labor costs. Most shippers are able to set up rules by weight or zones to ensure that they are selecting the best and most cost-effective option for each shipment while being able to process orders in batches.

What are you charging your customers?

Most customers want free shipping and thanks to Amazon Prime, they expect their packages to have free shipping and to arrive in 2 days. If your business model isn’t structured to support free shipping, there are ways to make sure you ship in the most cost-effective way. Let’s go through the various shipping options available:

  • Free shipping: This is the current standard. People expect free shipping and are even willing to wait 5-7 business days to receive their package.
  • Free shipping threshold: While you may not be able to offer free shipping to all of your customers, you could let them qualify for free shipping. Either through a spending threshold or an order size threshold. Both encourage them to add more to their cart (increasing average order size/value), which can be favorable for both you and the customer.
  • Subscription shipping: Some companies offer free shipping with a subscription. Much like Amazon, if you pay for a yearly subscription, you can qualify to get free shipping on all of your shipments.
  • Flat Shipping Rate: Offering a flat shipping rate is quite common, but you have to ensure that you aren’t overcharging for shipping and that you’re remaining competitive in your market. By studying up on 2018 USPS flat rates, you can simplify your shipping process and set expectations early for your customers. This is also beneficial to those who are offering promised delivery dates to customers. By offering flat rate shipping, you and your customer know what rates to expect and you can estimate shipping spend based on historical purchases.

With shipping costs topping the reasons most customers abandon carts, you will have to stay competitive with your shipping in 2018. The first step to optimizing your shipping is knowing the rates, then making sure you have the best carrier rates (ShippingEasy customers get Commercial Plus Pricing on USPS shipments), then acting accordingly to offer the most beneficial rates for both you and your customers. ShippingEasy is here to help you make 2018 your best year yet.

 

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If you enjoyed this content, consider joining us at PROSPER Show, March 13-14, 2018 at the Las Vegas Convention Center. 
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